Two-pot drama: Maspala workers left high and dry!

ONE hundred municipalities are under fire for withholding workers’ retirement funds.

The implementation of the two-pot retirement system on 1 September 2024 has exposed one of South Africa’s biggest pension fund scandals, revealing widespread non-compliance by municipal employers.

Millions of workers hurried to withdraw funds from the newly introduced savings pot.

For employees from 100 municipalities across Mzansi, this became a nightmare.

Their pension contributions, deducted from their salaries, had never been transferred to the relevant pension funds, leaving them unable to access their hard-earned savings.

In response, the Auditor-General’s (AG) office has initiated a high-level investigation. They are doing this in collaboration with pension fund administrators.

This aims to hold municipal managers, chief financial officers (CFOs), and senior officials accountable for breaching Section 38 of the Workers’ Pension Fund Act.

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Pension fund administration expert Keabetswe Tsuene confirmed that the investigation is expected to bring serious consequences for those responsible.

“The AG will highlight these violations in their reports and escalate the matter to the national Treasury. Treasury has already started taking action by withholding equitable share allocations from the affected municipalities as of March,” she said.

Tsuene assured workers that corrective measures are underway.

“We have flagged over 100 municipalities, and a detailed report has been submitted to Treasury,” she said.

She said that municipalities and officials found guilty of mismanaging pension funds face harsh penalties, including fines of up to R10 million, imprisonment of up to 10 years or a combination of both.

“In some cases, individual municipal officials have been held personally liable for the non-payment of pension fund contributions,” added Tsuene.